Balance transfer credit cards are booming in popularity as banks and credit unions try to poach each other's customers. There are now 105 balance transfer credit cards in the market. Banks and credit unions are now offering some amazing deals to get your balance but there are tricks and traps to be aware of when choosing a balance transfer deal.

What is a balance transfer credit card?

Balance transfer means paying off an old credit card or debt with credit from a new card. A balance transfer deal offers a low or zero rate of interest for an introductory period on balances transferred to the new credit card at the time of applying. W

What should I look for in a balance transfer deal?

A credit card balance transfer deal has a number of features. Look for:

The balance transfer rate

This is a special introductory rate and will be applied only tot he balance transferred. It does not apply to any purchases you make on the credit card. You want a rate that is zero or very low, for as long as possible.

The revert rate

This is the rate that will be applied to the balance you transfer once the introductory period expires. Any money still to be repaid will begin attracting interest, often backdated from the date of application. Often the revert rate will be higher than the standard purchase headline rate of the credit card.

Other rates

Look for the headline purchase interest rate of the credit card and the cash advance rate. These rates apply to any new debt you create.


Some balance transfer deals come with specific balance transfer fees, in addition to standard credit card fees. Often these fees, unlike many other card fees, are expressed as a percentage. For example - 2 per cent of the balance being transferred.


There are some great balance transfer credit cards now available with rewards programs, frequent flyer points and free insurances. You can compare balance transfer credit card rates, fees, features and rewards on Infochoice. Infochoice provides a first year cost comparison for all balance transfer credit cards so you can compare cards directly with each other.

Balance transfer credit card traps to avoid

Balance transfer credit cards are great for paying off stubborn debts. By giving you a holiday from interest charges, a balance transfer deal can provide breathing space and help you pay down your debt. However, your debts can multiply if you don't use the balance transfer credit card wisely. Be aware of these traps for the unwary:

If you don't pay off your balance within the introductory period, you will be charged a much higher rate of interest, possibly backdated to the date of application.

If you miss a monthly repayment or are late with repayments, you may void the balance transfer deal and you will be charged interest, possibly backdated to the date of application.

If you keep the old credit card and keep spending on it, you will be adding to your overall debts. Soon you could be faced with two credit card debts to repay instead of one.

In the long term, a no-frills, low rate, low fee credit card may be cheaper. If you can't repay the debt within the introductory period, look for a low cost card.

What is the best balance transfer credit card deal now available in Australia?

There are some amazing balance transfer deals now in the market. For example, the Citi Rewards Credit Card - Platinum is offering a zero per cent balance transfer rate for two years. The Qantas American Express Discovery Card has a balance transfer rate of zero per cent for 12 months with no annual fee. NAB's Low Fee Visa Card has a balance transfer and purchase interest rate of zero per cent for 15 months

You can compare all the balance transfer credit card offers from a range of different providers by clicking on the link.